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Finance Sec. Dominguez calls for further discussion on shift to Federalism

Finance Sec. Carlos Dominguez (Photo Credits:

Department of Finance (DOF) Sec. Carlos Dominguez requests for further discussions regarding the proposal to shift to a federal form of government.

In a statement, Dominguez clarified that he is not against federalism, but the proposal has ‘ambiguous provisions on revenue assignment’ and has ‘no provisions on expenditure assignment’.

We do not want the revenue assignment and the expenditure assignment to be misunderstood, as what happened in the recent case involving the Internal Revenue Allotment,” Dominguez said.

There are, likewise, principles on revenue sharing that do not appear to be well studied,” the Finance secretary added.

Dominguez said that is their duty and responsibility to point out these ambiguities, and ‘engage in a healthy, level-headed discussion, especially when the possible repercussions could result in dire, irreversible economic consequences’.

Based on the fiscal provisions of the draft charter, the DOF head fears that the government would reach a budget deficit of 6.7% which could lead to credit rating downgrade for the country and cause higher interest rates.

If the draft of the consultative committee is adopted, Dominguez claimed that the Federal government will have to cut its expenditure program by Php 560 billion to avoid negative economic consequences.

This means the national government may have to lay off 95 percent of its employees, or reduce the funds for the ‘Build Build Build’ program by 70 percent, or a combination of both,” Dominguez said.

During the Senate hearing on the 2019 national budget last Wednesday, August 8, Dominguez said that he will ‘absolutely’ not vote for the current draft charter presented by the Consultative Committee.

Due to his statements, Fr. Ranhilo Aquino, a member of the consultative committee, asked President Rodrigo Duterte to either sack or silence Dominguez.

Aquino also called for the dismissal of Socioeconomic Planning Sec. Ernesto Pernia, who said that federalism will ‘wreak havoc’ in the Philippines fiscal situation during a television interview.

We respect the opinion of Fr. Aquino, but we believe that such attitude would not enrich the level of discourse on the proposed Constitution,” Dominguez said in response to the statements of the consultative committee member.

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